Annual Reports Must Reflect Economic Uncertainty

Accounting’s Watchdog has warned directors that the must recognise the effect of global economic issues when producing their annual reports and accounts.

The Financial Reporting Council (FRC) has updated its guidance for the kind of risks that directors must consider when putting together their annual reports.

Companies’ exposure to country risk through the use of financial instruments; the impact of country-specific austerity measures; currency events; and providing enhanced disclosure post-balance sheet to avoid misleading investors have been highlighted by the regulator.

“Directors of companies in the UK are trying to assess the risks to their companies’ business models in difficult and rapidly changing economic conditions,” said FRC chief executive Stephen Haddrill (pictured).

“The FRC is committed to promoting market confidence in corporate reporting. It has published this guidance for Directors on the preparation of balanced and understandable disclosures that put their company’s position and prospects in context of the current market conditions.”

Story from Financial Director

Clegg: Raise Income Tax Threshold ‘Further and Faster’

Nick Clegg will say today that he wants to accelerate plans to raise the threshold for paying income tax to £10,000.

The deputy prime minister will say that he wants the coalition government to go “further and faster” in raising the pay level at which people start paying income tax to £10,000 a year, the BBC reported.

The deputy prime minister will argue that many families are at financial “boiling point” and need more relief, the BBC said.

The coalition has promised to raise the income tax threshold to £10,000 by the next election, set for 2015.

The income tax threshold was raised by £1,000 to £7,475 in the 2010 Budget, and the government plans to increase it further to £8,105 this year.

Clegg is expected to say: “Today I want to make clear that I want the coalition to go further and faster in delivering the full £10,000 allowance, because the pressure on family finances is reaching boiling point.”

At the last election, the Lib Dems pledged to raise the income tax threshold to £10,000 a year. The coalition agreed to implement this policy during this Parliament.

The deputy PM’s speech to the Resolution Foundation in London follows official figures showing the economy shrank by 0.2% in the final quarter of 2011.

It also comes ahead of the Budget on 21 March, increasing speculation that changes to tax thresholds could be announced.

Story from AccountancyAge

Tax Deadline Put Back by HMRC Over Strike

No fines will be handed out to anyone who submits their self-assessment tax returns online in the first two days of February.

The official deadline for submitting forms is 31 January, but a planned strike for that day is set to cause last-minute disruption.

So HM Revenue and Customs (HMRC) has effectively put back the deadline by two days.

More than two million people have still to file their returns online.

The tax authority has changed the procedure after earlier telling the BBC that there would be leniency owing to the strike.

The public sector union, the PCS, is planning strikes at call centres and inquiry offices to protest against the appointment of private companies to run call-handling trials in two contact centres.

Fines

The countdown to the tax return deadline has started in earnest. On Tuesday, 182,530 forms were filed online.

HMRC is introducing a much tougher system of fines this year. The £100 penalty will apply whether or not there is tax owed.

Penalties can mount up if a taxpayer neglects to send in a form, to £1,300 after six months and £1,600 after a year.

Even so, 600,000 of the nine million people who have to fill in the returns were expected to put off submitting them until 31 January.

On past form, 15% per cent of them, about 90,000, will ring for help and may find it impossible to get an answer, owing to the strike on deadline day.

“We have always been very clear that we want the returns - not the penalties. For that reason, we do not want anyone who cannot get through for help and advice on 31 January to be disadvantaged in any way,” said HMRC’s acting-director of general personal tax, Stephen Banyard.

David Gauke, exchequer secretary to the Treasury, said: “This strike could have caused thousands of people to incur fines, so I am pleased that HMRC has taken this commonsense approach.

“The government does not want anyone trying to file their tax return on time to be unfairly penalised because they were unable to get through for help and advice on the 31st.”

Those who have tax to pay will not face any interest on payments made on 1 and 2 February.

Appeals

Anyone who files after 2 February will be fined £100, although the normal appeals procedure is in place.

This requires taxpayers with a “reasonable excuse” to write to their tax office quoting their unique taxpayer reference. They should not wait for the penalty notice.

Examples given of valid excuses which would normally be accepted include the loss of documents through theft, fire or flood and the onset of a life-threatening illness.

Those choosing to send in tax returns on paper were required to submit them by 31 October. Some 34,000 penalty notices were sent out after the deadline passed.

Story from BBC News

Glasgow 2014 Gets Tax Boost

Athletes resident outside of the UK who compete at the Glasgow 2014 Commonwealth Games will be exempt from income tax, Chief Secretary to the Treasury, Danny Alexander will announce in Glasgow today. The decision mirrors a similar exemption in place for London 2012.

The decision will help spread the Olympic legacy into Scotland and encourage top athletes to compete at the Commonwealth Games. Under UK tax rules, any sportsperson not resident in the UK is subject to UK income tax on any payment in connection with their performance here, including a proportion of any worldwide endorsement income.

Chief Secretary to the Treasury, Danny Alexander, Secretary of State for Scotland, Michael Moore and Scottish Minister for the Commonwealth Games and Sport, Shona Robison will today visit the Commonwealth Sports Arena and Sir Chris Hoy Velodrome in Glasgow to see progress on construction of the venue where elite athletes from across the Commonwealth will compete in 2014.

Danny Alexander, Chief Secretary to the Treasury, said:

“With six months tomorrow to go until London 2012, I’m pleased to announce this special exemption for Glasgow 2014 which will prolong the Olympic legacy and help spread the long-term benefits into Scotland.”

“Everyone wants to see the best athletes compete at Glasgow 2014 and this exemption will make that more likely. Seeing the Sir Chris Hoy Velodrome today, it’s clear that Glasgow will be an outstanding venue for the Commonwealth Games which showcases the best of UK and international sporting talent.”

Minister for Commonwealth Games and Sport, Shona Robison said:

“I am delighted that an agreement has been reached to exempt international competitors from tax on any income arising from their appearance in the Commonwealth Games.”

“We want to deliver a memorable Games which attracts the cream of Commonwealth athletes to Glasgow 2014. Today’s announcement is a giant stride forward and follows productive discussions between the Treasury, the Scottish Government and the Glasgow 2014 Organising Committee.”

“The Games will show the world what vibrant and welcoming places both Glasgow and Scotland are, which is why this agreement is so important. This is yet another significant milestone in the journey towards the Games, which are on time, on budget and on track to deliver a lasting legacy for all of Scottish society.”

Welcoming the announcement, Glasgow 2014 Chairman, Lord Smith, said:

“This agreement opens the door for the Commonwealth’s elite international athletes such as Jamaica’s sprinters, Australia’s swimmers and cyclists and Kenya’s distance runners to compete at the Glasgow 2014 Commonwealth Games.”

“As a major multi-sport event, with a truly global reach, Glasgow 2014 and its Games Partners are working very hard to make the XX Commonwealth Games a ‘must attend’ event for the brightest stars of the Commonwealth.”

“There is no doubt that today’s announcement significantly increases the access and attraction for top performers to compete at Glasgow 2014.”

Councillor Gordon Matheson, Leader of Glasgow City Council, said:

“Securing this tax exemption for the Commonwealth Games is good news for everyone.”

“Glasgow’s aim is to deliver an outstanding Commonwealth Games and ensuring we have the biggest sporting stars competing here is essential.”

HMRC Will Cancel Late Filing Penalties for Soliders

British armed forces personnel in active service who have failed to file their tax return in time will have their penalties cancelled as a ‘Reasonable Excuse’ if they get in touch with HMRC.

As discussed on BBC Money Box, soldiers serving in Afghanistan will still face penalties if they fail to file by the 31 January deadline, but there will the chance to appeal.

Paul Lewis said: “HMRC refused to talk about this all week, but on Saturday morning at 11.30, [half an hour before Moneybox was broadcast], they told us if armed forces let us know, we will immediately cancel penalties. They will accept serving in Afghanistan as a Reasonable Excuse.

An HMRC spokesperson also told AccountingWEB: “For a service person who is serving with the military in Afghanistan, we appreciate that they have higher priorities than filling out their tax return. They’re in a fairly unique position, a combat position, and obviously that has to come first for them, and we completely understand and support that.

“So if they couldn’t complete the return by 31 January the penalty notice would be automatically generated by the system. However, if the service person contacts us as soon as they can to point out that they didn’t complete it because they were on a tour of duty in Afghanistan, we would cancel that penalty notice.

HMRC confirmed that while there is a 30-day deadline to appeal, they will “apply common sense”, and this will be waived for those serving in Afghanistan.

“You’re supposed to appeal within 30 days, but again we know that being on active service in Afghanistan is a pretty unique position, so we would be very flexible about that and as soon as they got in touch we would make sure they didn’t have anything to pay.

The advice is, don’t wait for penalty - send a letter in to accompany your late return.

Story from AccountingWeb

Win £100,000 for Filing Tax on Time

The government may offer a £100,000 prize to self-assessment filers for sticking to deadlines under current proposals.

The Behavioural Insight Team has suggested HM Revenue & Customs create a prize draw for those that file tax returns on time to ease congestion on IT systems in the run up to the 31 January deadline.

Similar schemes have been undertaken by some London local authorities which created a £25,000 prize draw for people who paid their council tax via direct debit. It is estimated the local authorities have managed to save about £345,000 annually due to the scheme.

The proposal has been welcomed by the CIoT with the institute claiming it suggested the idea a couple of years ago during meetings on the Carter Review which offered ideas on how to make IT more efficient at HMRC.

An HMRC spokesman said: “This is a very interesting contribution to how we maximise self assessment filing. The new penalties mean late filers could now face penalties of up to £1600 across the year and be excluded from a potential £100,000 prize draw. It pays to file on time.”

Last year about 78% of self-assessment tax returns were filed online which equates to about 7m submissions.

Story from: Accountancy Age

Government to Waive VAT on Military Wives’ Charity Single

The Chancellor of the Exchequer, George Osborne, has today announced that the Government will waive VAT on sales of the Military Wives choir’s Christmas single by making an exceptional one-off charitable donation to the Royal British Legion, and Soldiers, Sailors, Airmen and Families Association (SSAFA), the charities chosen to benefit from sales of the song. The donation will be equivalent to the sum of the VAT receipts collected on sales.

Recognising the service of the armed forces and the high levels of public support for the single, as well as the exceptional contribution both charities make through their work with members of the forces and their families, George Osborne and Defence Secretary Philip Hammond want to maximise the donation that the charity receives by adding the VAT equivalent.

George Osborne said:

“Our armed forces demonstrate incredible commitment to the nation and make sacrifices for all of us. The Military Wives choir is doing a great job of raising money for this hugely worthy cause. We will donate the tax collected on the single so that as much as possible of the money spent by the public on this fantastic song goes to charities helping our armed forces and their families this Christmas.”

Philip Hammond said:

“Christmas can be a particularly difficult time for our brave service personnel deployed on operations, but also for their families at home. I am delighted to be supporting the Military Wives choir in this initiative, who in turn are supporting our Armed Forces community.”

Tutors and Coaches Have Less Than One Month to Clean The Slate On Tax

Private tutors and coaches have less than a month left to tell HM Revenue & Customs (HMRC) about any tax that they owe.
They were offered a special tax plan - the Tax Catch Up Plan - in October this year. Registering by 6 January 2012 ensures that tutors and coaches don’t lose out on the best terms to disclose and pay what is owed.

The Tax Catch Up Plan is for people providing tuition or coaching, regardless of whether they have a registered qualification. It is aimed at those who profit from tuition and coaching as a main or secondary income, on which the correct tax has not been paid.

The opportunity is available to people teaching traditional academic subjects, fitness and dance, musical instruments, art, life coaching, personal training and other instruction.

After 6 January 2012, using information pulled together from different sources, HMRC will investigate those who have chosen not to come forward.

Marian Wilson, Head of HMRC Campaigns, said:

“Tutors and coaches who have notified us of their intention to disclose unpaid tax will have until 31 March to tell us what they owe and make arrangements to pay.

“From January we will use the information at our disposal to investigate tutors and coaches who have not declared their full income. I therefore strongly urge anyone in this group who thinks they may have outstanding income tax liabilities to get in touch with HMRC and get their tax affairs in order.

“This is the first step for those with undisclosed income or gains to avoid a full tax investigation and much higher penalties. Contact us before we contact you.”

The Tax Catch Up Plan has two stages:

• By 6 January 2012, tutors/coaches/instructors must register with HMRC to “notify” that they plan to make a voluntary tax disclosure.
• By 31 March 2012, those who have registered to notify must tell HMRC what they owe and pay the tax, interest and penalties due.

People can register online by completing a notification form - www.hmrc.gov.uk/ris/tcup/index.htm - or by calling HMRC on 0845 601 8817. A dedicated team is ready to help, Monday to Friday, 08:00 until 19:30.

If you think you may fall into this group, contact Davenports today to see how we can help

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HMRC Targets Fashion Houses Exploiting Interns

Fashion houses are the latest targets of an HM Revenue & Customs campaign aimed at ending the exploitation of interns.
HMRC has written to a number of fashion houses and designer labels warning them about non-payment of the National Minimum Wage.

The letters are being sent to fashion houses that exhibited at London Fashion Week in September 2011, and are expected to do so again at the capital’s Fashion Week in February.

Michelle Wyer, HMRC’s Assistant Director for National Minimum Wage, said:

“These letters give fashion houses plenty of warning that they are under scrutiny. If they are not playing by the rules, now is the time to put things right. Non-payment of the national minimum wage is not an option.

“Our message is clear: don’t wait for us to come knocking on your door; put things right now and avoid a penalty and possible prosecution.”

Letters to 102 fashion labels have been issued, with compliance visits due to begin early in the New Year.

If you have received one of these letters, why no get in touch to see how Davenports can help

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Know Your Oversea Shopping Limits This Christmas

Don’t get hit by unexpected charges when you are shopping for Christmas bargains this year, HMRC’s Angela Shephard advised today.

If you are going abroad to do Christmas shopping, or buying goods online from non-EU countries, you need to know how much you can buy before you have to pay import duty or VAT.

HM Revenue & Customs (HMRC) Head of Customs Policy, Angela Shephard, said:

“We know many people like to go abroad at this time to buy their Christmas gifts, or buy online from non-EU countries, and think that the ‘cheaper’ price they see is always the price they finally pay. HMRC is keen to remind the general public how much they can actually bring back from abroad or buy from an online overseas seller without having to pay import duty or VAT.

“You don’t want to be faced with unexpected extra charges, when you thought you had found a bargain.”

• Arriving in the UK by commercial sea or air transport from a non-EU country, you can bring in up to £390 worth of goods for personal use without paying customs duty or VAT (excluding tobacco and alcohol, which have separate allowances, and fuel). Arriving by other means, including by private plane or boat for pleasure purposes, you can bring in goods up to the value of £270. Above these allowances and up to £630, there is a duty flat rate of 2.5 per cent.
  Detailed information on the non-EU limits for alcohol and tobacco products can be found on HMRC’s website at http://www.hmrc.gov.uk/customs/arriving/arrivingnoneu.htm
• Should you buy goods over the internet or by mail order from outside the EU, you will have to pay VAT if the value of the package is over £15. 
• If the goods are over £135 in value, customs duty may also be due, although this will depend on what they are and where they have been sent from. Where, however, the actual amount of duty due is less than £9, this will not be charged. 
• If someone sends you a gift from outside the EU, import VAT will only be due if the package is valued at over £40. To qualify as a gift, the item must be sent from one private individual to another, with no money changing hands.
  Please note that excise duty is always due on all alcohol and tobacco products purchased online or by mail order.
• If you are thinking of going across the Channel to replenish beers, wines, spirits or tobacco products, there are no limits on the amounts of duty and tax paid goods you can bring back personally from another EU country, as long as they are for your own use. You may, however, be asked questions at the UK border if you have more than:

- 110 litres of beer,
- 90 litres of wine,
- 10 litres of spirits
- 20 litres of fortified wines,
- 800 cigarettes,
- 200 cigars,
- 400 cigarillos or
- 1kg of tobacco

to establish these quantities are genuinely for your own use.

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